Public is good: using democratisation against privatisation of public services

*Extended version of talk delivered in Zagreb, November 2015. Seminar with the title »Public is good: using democratisation against privatisation of public services», organized by Institute for Political Ecology.

I would like to thank the Institute for Political Ecology for the invitation and the opportunity to present experiences and thoughts on one of the most crucial pillars of the neoliberal trasformation: privatizations. I am going to present briefly the course of privatizations in Greece and I will outline the innovative features of the struggle against privatization of the water company in Thessaloniki. I will conclude with several thoughts regarding necessary requirements for a transformative process from a defensive struggle to protect public enterprises run by the state towards a more confident way of fighting that promotes a new model of democratic management and social control over enterprises that are related to common resources and goods.

1. The process of privatization in Greece began in the early 1990s. The right-wing government of the day considered privatization as the main policy objective. However, the implementation of this first wave of privatizations was blocked by strong political and labor union opposition.

The context changed after 1995, when Greece was admitted to candidacy in the European Monetary Union (EMU). This exerted pressure on the governments to implement structural reforms in order to foster policy credibility. During this second stage privatizations mainly involved public utilities (water, gas, electric distribution), banks, services, and telecommunications.

Since 2011 and under the rule of Troika the strategy of privatization became even more aggressive. A new Fund was created, responsible for gathering the state and public assets that were for sale and new legislation passed to facilitate the process. Indicatively, the assets were 35 state buildings, shares of the state in various enterprises like Athens International Airport, Hellenic Petroleum, Athens Water Company (EYDAP), Thessaloniki Water Company (EYATH), Hellenic Motorways, the companies of the major ports of Pireaus and Thessaloniki, Hellenic Post (ELTA) and 10 other Ports.

The major privatizations that are being pursued at this period of time is the two major ports of the country, the railway company, 14 regional airports, and the gas company. The further privatization of some major assets and companies of the electric companies group is postponed for the time being for reasons that are not connected to citizen’s or worker’s mobilization.

2. The movements that are developing against privatization of public enterprises and assets include apart from usual suspects like environmentalists – who are very well aware that privatization and subsumption of public properties under the logic of profit means severe threats for the environment – left and progressive groups, mainly include the relevent labor unions and local communities (especially in the case of ports and airports). These movements are mainly developed in traditional lines, namely by focusing on labor and community rights that are going to be compromised by the respective privatizations. That’s why they are having difficulties to build a wider front of social support and as we know from past experience they tend to dismantle if the government is willing to offer various types of compensation to the mobilized agents. This is a common pattern whenever the movement is centered exclusively on the rights of specific groups that are being affected directly by the process of privatization.

We could say that the majority of the movements and the citizens who were and are fighting against privatizations in Greece do not focus sufficiently on issues like democratization of public enterprises, participatory governance and citizen’s involvement in planning, implementation and control of the relevant policies. And this is the case mainly for two reasons: firstly, only recently the Greek society is gradually becoming aware of the dangers and the deadlocks of the privatization process: increase of price, underinvestment, poor maintenance of infrastructure and decrease of service quality. So, the citizen’s initiatives and movements are now realizing that we need a convincing rhetoric and a victorious strategy. So, we can speak of growing awareness but not a more radical – in terms of democratic processes – movement strategy yet.

Secondly, it hasn’t been developed sufficiently yet – both in practical terms and in terms of political imagination – effective methodological and organizational tools for functions like democratic management and control of public enterprises. However, due to the recent political developments in Greece – namely the insufficiency of traditional electoral politics to change the basic parameters of austerity and other neoliberal policies, like privatizations – plenty of people are beginning to explore ways and methods of impoving citizen’s real involvement in democratic, transparent and participatory processes that could take on the responsibility of running basic social and productive functions, part of which are the functions of controling and managing public enterprises.

On the other hand, there were various domains of social mobilization during the memorandum years that were characterized by participation, active involvement, self-organization,self-governing and deepening of democratic processes. Solidarity networks of various kinds, networks of distribution and social medical centers and drug stores developed organizational traits and shifts in social relations that point towards new models of collaboration and collective existence that can help us elaborate a different mentality of citizen’s control and management over basic functions of our societies. However, these features didn’t emerge through the struggle against privatizations which is the topic of our discussion here.

So, we could say that the Greek society is just beginning to follow the path that other european societies have already taken the last years. The path of increased confidence that leads to bolder goals like the remunicipalisation or bringing back services to public sector because of the negative effects of their privatization. A path that sometimes led also to democratisation of public services through experiments in participatory governance and involvement of various social groups in supervision and management of public companies and institutions. In other words, it seems that Greece has just begun to converge with what is already happening to other countries.

3. The struggle against the privatization of the water company in Thessaloniki was the most important one regarding the issues we are discussing here. A dynamic grass rooted movement managed to mobilize citizens and institutions and to spread the information concerning the consequences of water privatization, based on data extracted from the international experience.

In 2012 the government announced that will set the management and almost the total of the two biggest cities water companies stock capital under private control. When the government made the offer in 2012, apart from private firms, a component of the movement in Thessaloniki, the “initiative 136” proposed a model of social management and ownership. The initiative was named by the following idea: if we divide the estimate EYATH’s capital value out of the number of those it serves we would need 136 euros per each in order to have the company under social control. For that reason non-profit cooperatives per municipality have been created in order to be in charge of water management. The Initiative 136 collaborated closely with the workers of the company and the latter supported their proposal.

The interesting thing here is that a struggle against privatization didn’t use only the traditional arguments and tools but shaped a public proposal based on organizational principles of direct democracy: decisions would be taken at open assemblies, based on principles of self management and one person, one vote process. They proposed a deepening of democracy through social participation of public goods management and division to smaller local water companies, a development that could facilitate participation and control from the consumers due to the smaller scale. In that way they manage to overcome the reservations and dissatisfaction towards public companies and mobilise more people towards the fight against water privatisation.

Of course, there were various debates within the movement mainly related to the efficiency of such a proposal. Water is too important and needs high expertise and big amounts of money for investments in infrastructure and maintenance, attributes that the state is in a position to secure. It is not the kind of recourse that we can take risks by experimenting with its management. Additionally to that, many people were asking ‘why we should pay again for an infrastructure that we have already paid for as tax payers?’.

As it was expected, K136’s proposal was not accepted by the government, even though it attracted wide international interest and publicity. In March 2013 the EYATH Workers Union made an open call for the creation of a great alliance against privatization. Municipalities, Initiative 136, the Citizen’s Union for Water (second level union of water cooperatives), 12 non-profit water cooperatives, several grass rooted movements and independent citizens, co-founded the coordinating body ‘SOSte to Nero’ (Save Water). It is indicative that ‘SOSte to Nero’ took the stance that water should be under public control.

Despite differences, the need for unity prevailed. And not only that. By being excluded from institutional and official ways of promoting their struggle and influence the decision-making process, ‘SOSte to Nero’ made another unexpected move: it decided to organise a local popular referendum on water privatisation. On the 14th of March 2014, the Regional Association of Municipalities of Central Macedonia decided unanimously to hold a referendum despite the fact that its legitimacy was debatable. The inspiration came by official and unofficial referendums that took place in other countries or cities like Italy 2011, Berlin 2011, Vienna 2013. Three-member steering committees have been created to organize it in each municipality and municipal community of Thessaloniki, involving one representative from each municipality, one of K136 and one of the EYATH Workers. ‘Soste to Nero’ circulated a call for support at European level. EPSU (European Federation of Public Service Union) took a lead in coordinating financial donations as well as volunteers in order to facilitate the process and provide international observers as a way to enhance credibility and legitimacy. The referendum took place on the 18th of May, the day of local and European elections, despite the efforts of the government to prevent it. 218,002 citizens participated in the referendum (half of those who participated in the local and european elections at the region) and 98% of these voters said No to privatization.

As a result, the privatization process was blocked and dignity and social empowerment were strengthened. It is interesting to point out that by using tools and methods that enhance people’s participation like referendums, participatory budget, popular legislative initiatives etc, it is possible to achieve legitimacy and the necessary power to enforce people’s will. There were also positive institutional shifts: the higher court of Greece decided that the state should remove the water company of Athens from the fund responsible for the privatization process, in order to comply with the Constitution. Since then, several initiatives, conferences and events from grass rooted groups, active on water issue were asking for the same thing. In any case, it became clear that once we organize resistance effectively and mobilize people approrpiately, there are ways to overcome the power of corporations and the state.

4. Now, let me conclude with a few thoughts regarding necessary requirements for upgrading our power in the fight against privatizations:

– Instead of just convincing citizens and workers in the relevant companies that democratic management and social supervision is the right way to go, we must focus on elaborating planning, implementation and monitoring tools and organizational schemes that facilitate the transition towards this direction. We know that people are demoralized when it comes to those issues because of the fact that they seem to be terribly difficult – if not impossible – to make them function. Let’s reorient our attention from the political argumentation towards the improvement of a democratic and participatory operating system.

– the progress in various areas of human intellectual and practical experience, the innovative configuration of know-how and expertise in colaborative work and new technologies could provide us the initial ground for the systematic elaboration of efficient models of co-management, democratic decision-making and social supervision.

– Democratic management and social supervision is the only way to confront corruption in various levels in a period of time in which our societies will have limited resources at their disposal. We can afford neither the imposition of profit nor corruption to the administration of our infrastructures and the relevant resources.

– Privatization is the highest stage of the non-transparent state function of public enterprises; not an answer to it. Non-transparent state function of public enterprises deprives us from the right to decide or have a say on crucial issues. But it is considered to be a problem, since we the citizens are still typically the owners. Privatization legitimizes the problem; it transforms it into normality; only the owner have a substantive say and we are no longer the owners; we are just clients. Privatization is the final destination of a gradual derpivation of people’s right to have access to crucial decisions regarding crucial issues for their lives such as vital infrustrures of our societies. Not having any control over infrastructure is a dangerous direction especially in the era of increased geopolitical instability and war we are gradually entering.

From my experience people are gradually aware that the era of innocence and naivity has passed. It’s time the citizens to step in and take direct control of their own societies.



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